Calgary Mortgage Broker

5 Year Term?

The most common length of a commitment made to lock in a fixed payment on a mortgage is a 5 year term. This means that for the customer, the interest rate and the payment remain the same for the full 5 years. The good part about this is that it makes organizing your household finances convenient because you have a fixed monthly payment amount to budget for. The bad part is that 5 years is a long time and often people's situation changes in some way before the 5 years is up. That could be getting married, getting divorced, having kids, being job transferred to another town, etc. If you are locked into a 5 year term and your situation changes, you will have to pay a payout penalty to your bank that could be thousands of dollars! available to you!
So why 5 years?

Banks LOVE 5 Year Terms or More!

Yes you read that correctly. The big old bank wants you to lock in your mortgage for 5 years or even longer. The reason that they want this is that they can now budget on making a profit from you for that many years into the future. The Government has now also decided that it wants you to take a 5 year term or longer too. This is completely due to pressure from the big banks who have convinced the Government that this will create stability for homeowners (this is not necessarily true, but it is now a law).

A Calgary Mortgage Broker has access to mortgage rates and terms that range from 6 months, 1 year, 2 years, 5 years, and even 20 year terms. We are unbiased and will help you get the term for your mortgage that actually fits YOUR needs and NOT the banks.